GIC staff begin modeling provider price caps; Margaret Anschutz outlines lessons from other states

Margaret Anschutz, the GIC’s director of health policy and analytics, presented a comparative overview of provider price‑cap approaches adopted in other states and outlined a program of modeling the commission will pursue in 2026. "These terms refer to the practice of setting a limit on the maximum amount a medical service can be reimbursed for," Anschutz said, describing caps typically set as a percentage of the Medicare fee schedule.

She reviewed several state examples: Oregon’s 2017 legislative cap (implemented 2019) that saved the state more than $107 million in its first 27 months where applied; Washington’s 2025 law limiting certain reimbursements to 200% of Medicare for in‑network services in its state employee and teacher plans; Montana’s earlier program that produced savings but was later repealed; and other recent legislative actions in Vermont, Indiana and New Mexico. Anschutz cautioned that most of these policies are new and that rigorous evaluation is limited but that early findings from some states showed measurable savings without clear evidence of harmful cost shifting.

Turning to Massachusetts, Anschutz said hospital finances are heterogeneous: larger nonprofit systems often have robust reserves while independent community hospitals may be financially stressed. She said the GIC’s analytics team will model savings at various cap levels, identify which providers would suffer material revenue reductions under a GIC cap, and pair modeling results with audited financial statements and bond analyses to assess viability.

Commissioners emphasized that a price‑cap approach would require multiyear stakeholder engagement across state government, private health plans, hospitals and other actors and will not be a short‑term fix for the FY27 budget gap. Staff said they have capacity to run the initial modeling and will return with scenarios and implications in 2026.